Arrest Of Ex-yeltsin Aide Sought

Swiss Issue Warrant In Construction Firm Corruption Probe

January 28, 2000|By Colin McMahon, Tribune Foreign Correspondent.

MOSCOW — Swiss prosecutors have issued an arrest warrant for a former senior aide to Boris Yeltsin, the recently retired Russian president whose last year in office was filled with allegations of Kremlin corruption.

Pavel Borodin, who managed the Kremlin's array of business and property holdings, is suspected of money laundering and of taking bribes from a Swiss construction company called Mabetex.

Borodin is the first Russian official to be sought in the Mabetex probe, which has also targeted members of Yeltsin's family. Swiss officials told the Reuters news agency Thursday that they expect to issue more warrants soon.

Borodin has denied the charges and on Thursday called the arrest warrant "a provocation."

On Wednesday, Borodin was named secretary of state of a council that will oversee the new union between Russia and Belarus. Analysts said the post might provide Borodin immunity from prosecution.

Acting Russian President Vladimir Putin fired Borodin shortly after taking over from Yeltsin on New Year's Eve. Kremlin officials denied that Borodin's ouster was linked to the corruption charges, however, and they quickly arranged his new job.

The Mabetex scandal became in Russia part political tool and part symbol. Yeltsin's critics said it showed that the corruption plaguing Russian society penetrates deep inside the Kremlin walls.

One of Putin's first acts on becoming acting president was to issue a decree granting Yeltsin immunity from prosecution. Yeltsin, 68, cannot be detained, questioned or subjected to a search of his person or property, according to the decree.

The immunity guarantee does not apply to members of Yeltsin's family, a Kremlin spokesman said.

Swiss prosecutors allege that Mabetex, a Lugano-based construction company, paid millions of dollars in bribes to Borodin and other Russian officials to win more than $300 million in contracts in post-Soviet Russia.

In press reports based on evidence collected by Swiss investigators, Mabetex officials have been accused of buying yachts for the Yeltsin family and close Yeltsin associates; of covering credit-card expenses for the former Russian leader and his two daughters; and of laundering money through Bank of New York accounts held by Yeltsin cronies.

Swiss prosecutors are working with the FBI to investigate the alleged Bank of New York link. Yet for the most part, the Mabetex probe is separate from an FBI-led investigation into alleged Russian money laundering at the Bank of New York.

In an interview last week with The New York Times, Behgjet Pacolli of Mabetex acknowledged for the first time helping obtain credit cards for Yeltsin family members. Pacolli denied, though, that Mabetex paid the family's credit-card bills. He also said there was no card for Yeltsin himself.

Borodin, 53, stands at the center of the Mabetex probe.

"The `Kremlin old-timer' Pavel Borodin is known as one of the most influential men on the political Olympus," according to the newspaper Vedomosti. "He has fed, attired, chauffeured and entertained the powers-that-be for almost seven years. It is hard to find a state official with any clout who has not been a friend of Borodin's."

Borodin used to be Yeltsin's tennis partner when the former president was fit enough to play his favorite sport. Putin started out working for Borodin when he first joined the Kremlin after leaving the St. Petersburg government.

The Kremlin empire that Borodin so recently ran is huge, worth tens of billions of dollars and employs nearly 100,000 people. Government buildings, country homes, resorts and fleets of official vehicles all fell under Borodin's control. So did hundreds of millions of dollars in Kremlin contracts.

Borodin stayed at Yeltsin's side for years despite rumors of corruption in his department and business deals gone sour.

In May 1998, Borodin was on the verge of being forced out by other Kremlin insiders, and the president's press office even went so far as to announce his resignation. But Yeltsin flew into a rage when he heard of his aide's pending ouster and ordered Borodin reinstated, according to Russian press accounts.

Now, not only is Borodin under investigation but so are members of his family.

After Putin ousted Borodin on Jan. 10, the lead Russian investigator in the Mabetex case denied any connection between the Mabetex scandal and Borodin's dismissal. But the Moscow newspaper Sevodnya quoted an anonymous source in the attorney general's office as saying, "What information the investigation has already unearthed is sufficient to fire Borodin from state service."